RBI Directs Banks to Integrate DoT's Financial Fraud Risk Indicator

In a significant move to bolster cybersecurity in the financial sector, the Reserve Bank of India (RBI) issued an advisory on June 30, urging Scheduled Commercial Banks, Small Finance Banks, Payments Banks, and Co-operative Banks to incorporate the Financial Fraud Risk Indicator (FRI) developed by the Department of Telecommunications (DoT) into their systems.

Strengthening Cyber Fraud Prevention Through Tech Integration

“The Department of Telecommunications (DoT) welcomes the Reserve Bank of India’s (RBI) advisory issued on June 30, directing all Scheduled Commercial Banks, Small Finance Banks, Payments Banks and Co-operative Banks to integrate the Financial Fraud Risk Indicator (FRI) developed by DoT into their systems.”

This strategic integration marks a major step toward a coordinated response to combat cyber-enabled financial frauds and promote data sharing between financial institutions and central digital intelligence platforms.

How the Integration Will Work

The Reserve Bank of India’s directive aims to automate real-time fraud detection by enabling banks to exchange information with DoT’s Digital Intelligence Platform (DIP) via secure, API-based systems. This mechanism allows:

• Real-time verification of transaction-linked mobile numbers

• Automated fraud risk assessment before processing transactions

• Continuous updates based on cybercrime intelligence

What is the Financial Fraud Risk Indicator (FRI)?

Classification Based on Risk

“Launched in May 2025 by DoT’s Digital Intelligence Unit (DIU), the Financial Fraud Risk Indicator is a risk-based tool that classifies mobile numbers as Medium, High or Very High risk based on data from the National Cybercrime Reporting Portal, DoT’s Chakshu platform and intelligence inputs from banks and financial institutions.”

The FRI tool draws from multiple data sources to identify potential fraud threats, offering a predictive edge to banks and payment service providers.

Key Benefits for Financial Institutions

Banks can leverage the FRI system to:

• Decline or delay high-risk transactions

• Alert users of suspicious activity linked to their mobile numbers

• Mitigate large-scale UPI and digital transaction fraud

“Using the FRI, banks can take immediate preventive steps such as declining suspicious transactions, alerting customers, or delaying high-risk transactions. DoT’s DIU also shares a Mobile Number Revocation List with stakeholders, which includes numbers disconnected due to links with cybercrime or misuse.”

Banks and Fintechs Already Onboard

The FRI system is already in use by several major financial players such as:

• PhonePe

• Punjab National Bank

• HDFC Bank

• ICICI Bank

• Paytm

• India Post Payments Bank

With UPI transactions reaching over ₹18 lakh crore in June 2025, and more than 12 billion monthly transactions, integrating FRI will play a crucial role in safeguarding digital payments across India.

Aligned with Digital India Vision

“DoT has reiterated its commitment to support banks and financial institutions with technology-driven, coordinated solutions like the FRI. The move aligns with the Government’s Digital India vision and aims to strengthen digital trust, improve fraud detection and enhance resilience across the financial ecosystem.”

By facilitating the secure exchange of fraud intelligence and building a resilient digital payment infrastructure, this integration sets a new benchmark in public-private collaboration to protect India’s growing base of digital users.

Conclusion :

The Reserve Bank of India's move to mandate the integration of the Department of Telecommunications' Financial Fraud Risk Indicator (FRI) into banking systems represents a significant step forward in strengthening India’s defense against digital financial fraud.

As the nation witnesses exponential growth in UPI and online transactions, the need for real-time, intelligence-driven fraud prevention tools has become critical. The FRI system empowers banks to make informed decisions, halt suspicious transactions, and alert customers before financial harm occurs.

By leveraging data from platforms like the National Cybercrime Reporting Portal and Chakshu, along with inputs from financial institutions, the FRI provides a robust risk-classification mechanism. Its integration through secure APIs with the Digital Intelligence Platform (DIP) ensures seamless and continuous fraud monitoring.

With major banks and fintechs already on board, this move is expected to enhance public trust in the digital ecosystem. Aligned with the Digital India vision, this initiative reinforces India’s commitment to building a secure, transparent, and resilient financial infrastructure.